Spam Enacts High Costs on Businesses

There is no doubt that spam is pervasive and can be a major productivity killer if the right safeguards aren't in place. In fact, MessageLabs indicates that 78.2 percent of all e-mails sent during the month of August were spam. To make matters worse, Sophos reports that by the end of June, 96.5 percent of all e-mails to businesses were spam. In an effort to quantify the financial cost of spam to businesses, Ipswitch released the results from its recent "Spamometer" survey.

According to Ipswitch's Marketing Manager, Brad Senter, the "Spamometer" survey was created by culling data from three Ipswtich e-mail servers that receive a combined one million e-mail messages per week. This data was then compared to that of other leading vendors that collect data from approximately 10 times as much e-mail volume.

Creidt: Ipswitch

In an effort to exemplify how spam can exact a financial cost to businesses, Ipswitch examined how spam could impact a hypothetical company that had no anti-spam protection at all. At this hypothetical company, 1,000 employees receive an average of 40 e-mails per day, with 60 percent of the e-mails being spam. (Senter told us that while global spam estimates are around 80 percent, Ipswitch chose a more conservative estimate for this particular exercise.) With an estimated 5 seconds to deal with each spam message, Ipswitch estimates that each employee at this company would spend an average of 12.17 hours per year dealing with spam (this calculation is based on the assumption that these employees are on e-mail 365 days per year). Based on an eight-hour workday, this works out to be 1,520 hours of "lost productivity" for the entire company.

Ipswitch estimates that this level of productivity loss would cost the company $549.12 per employee per year--or $549,120 for all 1,000 employees per year--including expenses associated with the "amount of time IT support staff spends combating spam and amount of time wasted by the email servers in processing all the spam emails, anti-spam measures." Ipswitch also mentions that spam enacts other costs as well, as a result of damage done from viruses and phishing.

In the real world, a business would hopefully have some sort of spam protection in place and therefore would not put its employees in the situation of having to manually deal with every spam message that gets sent to their mailboxes. But no matter how good the spam filters are that are in place, inevitably some spam will still make it through. And if a spam filter is not set up correctly or is too aggressive in what it identifies as spam, legitimate e-mails can be inadvertently blocked.

Spam Laws estimates that 14.5 billion spam messages are sent globally every day. Its data shows that a little over one third (36 percent) of all spam messages are advertising related, with just under one third (31.7 percent) being adult related. Financially based spam messages make up 26.5 percent of spam messages, with only about 2.5 percent being scams or frauds. (We presume the remaining 3.3 percent don't fit into any of these four categories.) Spam Laws further states:

"According to a study by the Radicati Research Group Inc., a research firm based in Palo Alto, California, spam costs businesses $20.5 billion annually in decreased productivity as well as in technical expenses. Nucleus Research estimates that the average loss per employee annually because of spam is approximately $1934.

Predictions for the future costs of spam don't look any brighter. It is estimated that 58 billion junk emails will be sent every day within the next four years, a figure that will cost businesses some $198 billion annually.

However, some researchers believe that based on an estimated current cost of $49 annually per inbox, the total cost of spam for businesses will balloon to $257 billion per year if spam continues to flourish at its current rate."

Ipswitch has an obvious vested interest in promoting the potential high cost to companies that spam can exact, as Ipswitch provides products and services that purport to minimize the amount of spam that makes it into people's inboxes. As do other companies that provide similar services, Ipswitch is trying to get the word out that their products and services can help companies minimize losses from spam. And even though the numbers mentioned above from the different studies don't match up, the message is still the same: spam is costing businesses billions of dollars.